Gold finance company Muthoot Finance today said the company hopes to hit the debt markets with the third bond issue in this fiscal for up to Rs 500 crore by this month-end.

"We have applied for Sebi permission this Monday and hope to get the go-ahead early next week for our Rs 250 crore NCD (non-convertible debenture) issue which has a green-shoe option of the same amount," Muthoot Finance managing director George Alexander Muthoot told PTI over the phone from Kochi.

This is the third NCD issue from the company this fiscal. Earlier, the largest gold financing company in terms of loan portfolio had raised Rs 1,150 crore through two NCD issues.

Stating that this is aimed at infusing working capital, he said the company has not fixed the coupon rate for the issue yet as the market regulator's nod is awaited.

In the previous two issues, the company had offered 13 per cent for two years and 13.25 percent for three-five years.

When asked whether the proposed issue could offer the previous coupon rate, Muthoot answered in the affirmative.

The company has so far raised Rs 10,000-crore working capital from as many as 30 banks and mutual funds. Since the bank lending to gold financing companies was tightened by the Reserve Bank recently, he said his cost of fund has gone up.

In the recent past, the cost of funds has gone up 2.5-3 per cent to 12.5-13 per cent, while net interest margin remained at 10.81 per cent as the end of Q3.

However, he said in the fourth quarter he sees marginal fall to 9.5 per cent as he doesn't see the interest rates falling before the new fiscal.

On the rationale for the third NCD route, Muthoot said most of the banks have now reached their sectoral cap to the industry, so diversified fund raising avenues are explored.

As of the December quarter, the highly leveraged company had an asset size of Rs 23,000 crore, of which the share capital is only about Rs 3,000 crore, debt being the rest.

On expansion plan, he said the company is likely to overshoot the branch plan, taking the overall network to 3,480 by the end of the fiscal.

During the December quarter, the company's retail loan assets rose by Rs 1,944 crore to Rs 22,885 crore, while income grew 91 per cent to Rs 1,231 crore, helping the company report a whopping 61 per cent spike in net profit at Rs 251 crore.